Tuesday, April 29, 2008

The best way to predict iPhone sales is by lookingat the history of the iPod sales and picking out the one year which best describes the iPhone momentum and applying the figures to the what is know so far.

These are the iPod sales for every full year since its introduction:

The most obvious trend is the amount of sales of the last quarterbeingmuch greater compared to any of the other 3 quarters.We all know this is due to the holyday season.Because we have some sales figures of the iPhone already we can see its sales per quarter to be following the same momentum.

Note that iPhone was not on sale during Q2 and was selling for only 3 DAYS during Q3.

Since Apple seams to be happy with this trend each year, we can assume they plan the same situation for the iPhone sales in 2008.Because we have the results from the first quarter – 2008 Q2, we can use two methods to calculate the other 3 quarters:

1.Average iPod quarter sales increase compared to the same quarter the previous year.

2.Average iPod quarter sales increase compared to the Q2 of the same year.

If we use the average data from the 6 consecutive iPod sales years and we apply it to the iPhone based on the known 2008 Q2 sales, we get the following results.

Method 1.

If this scenario manifests we will see a total of 18,245,636. That’s over 18 million iPhones or 80% above Apple’s goal.

Method 2.

If this scenario manifests we will see a total of 18,901,934 . That’s close to 19 million iPhones or 90% above Apple’s goal, however very close to the 20 million they have reportedly ordered so far. (10 million last year and 3+7 million this year)

There is actually a simplerand more accurate way to use the iPod’s sales figure to foretell the iPhone 2008 sales performance. That is to measure the iPhone grouth and use only the most similar iPod year to predict the iPhone sales. The best way to do that is to compare the results of all strong Q1s to the following Q2s. If a naturally low Q2 it shows an increase then the rest of the year will likely be very successful and see a phenomenal growth compared to the previous year.

Here are the iPod Q1Y and Q2(Y+1) results

It is particularly interesting to see thatin 2004 and 2005 the naturally low second quarter has shown better results than the naturally strong first quarter of the previous year.What this has resulted is in tremendous iPod sales increase during 2004 and 2005.

Now lets look at the only available such statistic for the iPhone

On first glance, it would seam that iPhone is likely to perform better but similarly than the iPod performed in 2003, 2006, 2007 and likely in 2008 . HoweverApple has said that they will account for all iPhones sold after 6th of March as part of the Second quarter - Q3.

This is the key to the Pandora box. Apple has reported only January's and February's iPhone sales for Q2!

What this means is that iPhone sales could have been 1/3 more had Apple reported the March iPhone sales as part of the first quarter – Q2.

Futher, the golden age of iPhone unlocking started around the middle of March when the Zibri unlocking solution allowed for one click - 4 minutes uncloking that anyone can do. It was probably another week or 2 before this started to affect iPhone sales around the world.

So not only did we miss to see the impact of the March 6 announcement on iPhone sales, but also most of the effects of effortless illegal unlocking.It will therefore be fare to say that had Apple reported all sales until the 1st of April the first quarter result would have been at least 50% better.

Now the2008 iPhone sales potential look so much more like iPod one from 2004 and 2005.

We just estimated probable iPhone Q2 sales as 2.5 million iPhones. What will the sales look like during the next 3 quarters if we assume the average increase as seen in the iPod in 2004 and 2005.

In total if the above logic happens to be true, Apple could potentially sale up to 42,857,089 iphones by the end of 2008.

Yes that almost 43 milion iPhones.

Well, I hope that Apple orders some more than the 20 milion iPhones they have already ordered so far, case they will run out of stock very fast indeed.

There are a few developments in the around the iPhone that are likely to help achive these phenomenal sales.

- Availability of a carrier specific but very affordable iPhone with contract (<300$),>

- Official introduction in countries such as Australia, China, India, Switzerland, Austria, Ilaty and others before the year is up.

- The 200,000 + registered developers for the iPhone Platform trough the SDK, developing many games and apps after June, 08

- KPCB's 100,000,000 iFund for the iPhone platform stimulating developers, bussinesess and people to invest in the iPhone platform.

- Successful performance of the enterprise update of the iPhone its adoption by 1/3 of fortunes top 500 companies that has shown interest so far.

- The 45 new international stores Apple is planning by the end of the year selling officialy unlocked phones. (Locked phones only sold in the carrier stores)

- Introduction of a 3G/GPS version of the iPhone to initially complement and then replace the current model.

However to calculate the end sales a much more simple approach may be used. Approach that is more in line with Apple current optimism of the sales. Optimism that they will slightly exceed the projected 10 million sales.

I gues it all depends on how aggressive Apple wants to be in sales and how much they have learned from the global illegal unlocking about the actual demand for the iPhone and the bussiness model they should be pursuing.

The worst thing that now can happen to Apple is not that iPhone will not be successful but that they will greatly underestimate demand. Thus likely losing a very good chance to climb their market share higher than their the most optimistic projections. Something like the Amazon Kindle wifi digital book.

Saturday, April 12, 2008

A few details were unveiled recently about long expected iPhone killer from Nokia, the Xpress 5800 Media Tube. What a long name actually. At the same time, some unofficial details seam to surfice about the 3G model of the iPhone, that Apple will apparently unveil this June.

Let's compare them with what we know.Bear in mind that 2 things have been assumed about the 3G iPhone. First, its 2.5 mm thinner than it use to be and second it also supports GPS.

So rather than just list the specs of the two device, I will only list the differences.

Size:

based on dimensional data give, Nokia's Tube apparently takes 31% more volume in your pocket. An advantage for the iPhone.

Weight:

Nokia's Tube is 104 grams, while the iPhone is currently at 135 grams. However, the new 3G iPhone model is going to be thinner and likely lighter, so its a Draw in my opinion.

Screen:

The iPhone still has 46% bigger screen area, allowing for finger activated keyboard. This is a big plus for it, since Nokia's Tube users will need a stylus for much of the controls, typing included.

Resolution:

Nokia Tube's screen has approximately 235dpi, while the iPhone is at 163dpi. However, the iPod Nano Apple shipped last september had 204dpi screen, so it is entirely possible that the new iPhone has at least 204dpi screen too. Still a possible small advantage to the Tube here.

Supoted Aps:

By the time the Tube launches, iPhone will definitely have more useful native apps available to it if we consider the curretly industry momentum. The bigger screen and keyboard will also mean greater functionality. Also the Aps Store for the iPhone is way more easy method for distributing Aps than anything else out ther. An advantage for the iPhone again.

Operating System:

Mac OsX is definitely in a league of its own in terms of desktop computers, let alone mobile phones, where everybody else's OS is much less powerful. A huge advantage for the iPhone here too in terms of future potential

Touch Interface:

iPhone will use almost two year proven Multy touch UI, while the Tube will be the first Nokia device to feature their Touch (not Multy touch) Simbian UI. So the iPhone has a big advantage here too.

Camera:

Tube's 3.2 Megapixel camera with auto focus is definately supperior to the iPhone current one, but it is almost 100% certain that by the time the Tube lauches, the iPhone will have a much batter camera too. That's based on the 5 and 8 Megapixel camera sensor prototypes demonstrated already. So, I think its a draw here.

Memory:

The Tube has 140Mb of internal Memory vs the current iPhone's 128MB. Given the recent drop in memory price and the addition to native aps to the iPhone, I suspect then the new model might actually double its memory to 256MB. So I will say, its a draw for now.

Lauch date: 3G iPhone is in 2nd quater of 2008, while the Nokia's Tube is stated for first quater of 2009 release, giving the 3G iPhone at least half and year head start.

Distribution: Nokia has a huge distribution advantage over Apple in terms of mobile devices. However, Apple is gaining with every month and by the time Nokia releases the Tube, Apple is likely to be able to compete with it in most of all available markets. Actualy iPhone is currently being used all around the world and its market share in 3rd world countries is actualy going to overtake Nokia's smartphone one very soon. Nokia will only keep a market advantage in 3G Europe, but its 3G phones perform worse than the iPhone in the rest of the world. So its going to be an overall draw in terms of distribution.

Price: Nokia's closest iPhone smartphone competitors have always costed more, because they are always sold unlocked. If the current trend continues it is likely that the Tube will still be a lot more expensive than the iPhone, giving the the later a very important advantage.

Conclusion:

The Xpress 5800 Tube is not an iPhone Killer and never will be. There is no device that will ever be able to compete with the iPhone in terms of awesomeness and capability. Why? because that's is how it is with all Apple products. The iPod, the iMac and the others are all the benchmarks in the industry. IPhone is likely to overturn the mobile industry same as the iPod did with the mobile player industry. Apple will never settle for a second best design and performance.